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Promotion and
Pricing Strategies
Prepared by
Mehul Rasadiya
K.K.Parekh Institute of Management of Studies

2. 5 Describe pushing and pulling
promotional strategies.
1 Discuss how integrated marketing
communications relates to a firm’s
overall promotion strategy. Outline the different types of
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pricing strategies.
2 Explain promotional mix and
outline the objectives of promotion. Discuss how firms set prices in
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the marketplace, and describe the
four alternative pricing strategies.
Summarize the different types of
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advertising and advertising media.
8 Discuss consumer
perceptions of price.
Outline the roles of sales
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promotion, personal selling, and
public relations.

3. • Promotion is the function of
informing, persuading, and influencing a
purchase decision.
• Integrated marketing communications
(IMC) is the coordination of all promotional
activities—media advertising, direct
mail, personal selling, sales promotion, and
public relations—to produce a unified
customer-focused message.

4.  Must take a broad view and plan for all
form of customer contact.
 Create unified personality and message
for the good, service, or brand.
 Elements include personal
selling, advertising, sales
promotion, publicity, and public relations.

5. • Promotional mix - combination of personal and
nonpersonal selling techniques designed to achieve
promotional objectives.
• Personal selling - interpersonal promotional process
involving a seller’s face-to-face presentation to a
prospective buyer.
• Nonpersonal selling - advertising, sales
promotion, direct marketing, and public relations.

8. • Product placement - marketers pay placement fees
to have their products showcased in various
media, ranging from newspapers and magazines to
television and movies.
• Guerilla marketing - innovative, low-cost marketing
efforts designed to get consumers’ attention in
unusual ways.

9. • Advertising - paid nonpersonal communication
delivered through various media and designed
to inform, persuade, or remind members of a
particular audience.
• Consumers receive 5,000 marketing
messages each day.
• Firms need to be more and more creative and
efficient at getting consumers’ attention.

10. • Product advertising - messages designed to sell a
particular good or service.
• Institutional advertising - messages that promote
concepts, ideas, philosophies, or goodwill for
industries, companies, organizations, or government
entities.
• Cause advertising - institutional messaging that
promotes a specific viewpoint on a public issue as a
way to influence public opinion and the legislative
process.

11. • Informative advertising - used to build initial
demand for a product in the introductory phase.
• Persuasive advertising - attempts to improve the
competitive status of a product, institution, or
concept, usually in the growth and maturity stages.
• Comparative advertising - compares products
directly with their competitors either by name or by
inference.
• Reminder-oriented advertising - appears in the late
maturity or decline stages to maintain awareness of
the importance and usefulness of a product.

13. Television Magazines
• Easiest way to reach a large • Consumer publications and trade
number of consumers. journals.
• Most expensive advertising • Can customize message for different
medium. areas of the country.
Newspapers Direct Mail
• Dominate local advertising. • Average American receives 550
• Relatively short life span. pieces annually
Radio • High per person cost, but can be
• Commuters in cars are a captive carefully targeted and highly
audience. effective.
• Satellite radio offers new Outdoor Advertising
opportunities. • $3.2 billion annually
• Requires brief messages.

14. Online and Interactive Advertising
• Viral advertising creates a message that is novel or entertaining
enough for consumers to forward it to others, spreading it like a
virus.
• Many consumers resent the intrusion of pop-up ads that
suddenly appear on their computer screen.
Sponsorship
• Providing funds for a sporting or cultural event in exchange for a
direct association with the event.
• Benefits: exposure to target audience and association with
image of the event.
Other Media Options
• Marketers look for novel ways to reach customers:
infomercials, ATM receipts, directory advertising.

15. Sales promotion - nonpersonal
marketing activities other than
advertising, personal selling, and
public relations that stimulate
consumer purchasing
and dealer effectiveness.

16. Premiums, Coupons, Rebates, Samples
• Coupons attract new customers but focus on price rather than
brand loyalty.
• Rebates increase purchase rates, promote multiple
purchases, and reward product users.
• Three of every four consumers who receive a sample will try it.
Games, Contests, and Sweepstakes
• Introduction of new products.
• Subject to legal restrictions.
Specialty Advertising
• Gift of useful merchandise carrying the name, logo, or slogan
of an organization.

18. • A person-to-person promotional presentation to a
potential buyer.
– Customers are relatively few in number and
geographically concentrated.
– The product is technically complex, involves trade-
ins, and requires special handling.
– The product carries a relatively high price.
– It moves through direct-distribution channels.
• Example: Selling to the government or
military.

19. Order Processing
• Identifying customer needs, pointing out merchandise to meet
them, and processing the order.
Creative Selling
• Promoting a good or service whose benefits are not readily
apparent or whose purchase decision requires a close analysis
of alternatives.
Missionary Selling
• Representative promotes goodwill for a company or provides
technical or operational assistance to the customer.
Telemarketing
• Personal selling conducted by telephone; regulated by the
Federal Trade Commission’s 1996 Telemarketing Sales Rule.

21. • A good salesperson varies the sales
process based on customers’ needs and
responses.
• Prospecting - identifying potential
customers.
• Qualifying - identifying potential
customers.
• Approaching - analyzing available data
about a prospective customer’s product
lines and other pertinent information.

22. • Presentation Salespeople
communicate promotional messages.
They may describe the major features
of their products, highlight
the advantages, and cite examples of
satisfied consumers.
• Demonstration Reinforces the
message that the salesperson has
been communicating.

23. • Use objections as an opportunity to
answer questions and explain how the
product will benefit the customer.
• The closing is the critical point in the
sales process.
• Even if the sale is not made, the
salesperson should regard the
interaction as the beginning
of a potential relationship.

24. • An important part of building a
long-lasting relationship.
• May determine whether the
customer will make another
purchase.

25. • Public relations - a public organization’s
communications and relationships with its various
audiences.
– Helps a firm establish awareness of goods and services and
builds a positive image of them.
• Publicity - stimulation of demand for a
good, service, place, idea, person, or organization
by disseminating news or obtaining favorable
unpaid media presentations.
– Good publicity can promote a firm’s positive image.
– Negative publicity can cause problems.

26. • Pushing strategy - relies on personal selling to market an item
to wholesalers and retailers in a company’s distribution
channels.
– Companies promote the product to members of the marketing
channel, not to end users.
• Pulling strategy - promote a product by generating consumer
demand for it, primarily through advertising and sales promotion
appeals.
– Potential buyers will request that their suppliers—retailers or local
distributors—carry the product, thereby pulling it through the
distribution channel.
• Most marketing situations require combinations of push
and pull strategies

28. Profitability Objectives
• Maximize profits by reducing costs.
• Maintain price while reducing package size.
Volume Objectives
• Base pricing decisions on market share goals.
Pricing to Meet Competition
• Meeting competitors’ price.
• Competitors cannot legally work together to set prices.
• Competition can result in a price war.

29. Prestige Objectives
• Establishing a relatively high price
to develop and maintain an image
of quality and exclusiveness.
• Recognition of the role of price in
communicating an overall image
for the firm and its products.
• Pricing is influenced by people in
different areas of a company.

30. Breakeven analysis -pricing technique used to determine the
minimum sales volume a product must generate at a certain
price level to cover all costs.

32. Skimming Pricing
• Setting an intentionally high price relative to the prices of competing products.
• Helps marketers set a price that distinguishes a firm’s high-end product from
those of competitors.
Penetration Pricing
• Setting a low price as a major marketing weapon.
• Often used with new products.
Everyday Low Pricing and Discount Pricing
• Maintaining continuous low prices.
• Discount pricing - attracting customers by dropping prices for a set period of time.
Competitive Pricing
• Reducing the emphasis on price competition by matching other firms’ prices.
• Concentrating marketing efforts on the product, distribution, and promotional
elements of the marketing mix.

33. Price-Quality Relationships
• Consumers’ perceptions of quality closely
tied to price.
• High price = prestige and higher quality.
• Low price = less prestige and lower quality.
Odd Pricing
• Setting prices in uneven amounts or
amounts that sound less than they really
are.
– Example: $1.99 or $299.